Jobs unveils speedier iMacs, Power Macs

Apple Computer's chief executive reveals new models during his keynote address at Macworld Expo.

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Steve Jobs, CEO, Apple
NEW YORK--Apple Computer Chief Executive Steve Jobs unveiled speedier iMacs and Power Macs during his keynote speech Wednesday at the Macworld Expo here, though the announcements lacked the punch he usually offers at the trade show.

Jobs introduced a 500MHz iMac, with 128MB of RAM and a 20GB hard drive, for $999. It comes in indigo and snow, which Apple resurrected after retiring the color earlier this year in favor of Flower Power and Blue Dalmatian.

He touted another model in snow and graphite that runs at 600MHz, with 256MB of RAM and a 40GB hard drive, for $1,299. These two models are available now.

The third model, which will be available in September, runs at 700MHz, with 256MB of RAM and a 60GB hard drive for $1,499. It will also come in snow and graphite.

Each of the new models will include a CD-RW drive. Previously, the iMacs ran at 400MHz to 600MHz.

Still, Jobs' speech lacked its typical surprise ending--when he unveils the latest and greatest. Instead, Jobs ended with a preview of iDVD 2, an update to the program that lets consumers put their digital videos onto DVD. The new software is set to come out in September.

What Jobs didn't announce--a much-anticipated, flat-panel iMac--grabbed analysts' attention.

"None of the announcements are as dramatic as the introductions that Apple made earlier in the year...which could limit their impact on sales in the second half of the year," said David Bailey, an analyst at Gerard Klauer Mattison.

Bailey said he was particularly concerned that Apple made comparatively minor changes to the iMac while hiking the price of the entry-level iMac by $100 to $999.

"Price is more important rather than less important" in this difficult economy, he said. However, Bailey said he is hoping Apple will come out with more dramatic changes in time for the holidays.

However, Apple Vice President Phil Schiller told CNET News.com that the company is keeping a $799 entry-level iMac for the education market, an acknowledgment that price is the key factor for many schools.

"There are certain districts that only have so many dollars to spend" and need to get a specific number of computers for those dollars, Schiller said.

Although Jobs did not mention it in his keynote, the company is also launching a promotion to give Mac buyers a free printer, as well as $100 rebates with the purchase of certain Canon camcorders, a Handspring Visor Edge handheld, a Hewlett-Packard 315 digital camera or the Rio 600 MP3 player.

The offer is good on purchases made between Wednesday and Oct. 14.

Power Mac Jobs also introduced three faster, slightly restyled Power Macs, which had previously run at 466MHz to 733MHz.

The new entry-level model runs at 733MHz. There is also an 867MHz model. The third model has two 800MHz chips.

The 733MHz Power Mac, which sells for $1,699, includes 128MB of memory, a 40GB hard drive and a CD-RW drive.

The 867MHz version, priced at $2,499, includes 128MB of RAM, a 60GB hard drive and a SuperDrive, which reads and writes both DVDs and CDs.

The high-end machine, which comes with two 800MHz chips, sells for $3,499 and comes with 256MB of memory and an 80GB hard drive.

All three new Power Macs will also sport a new silver-colored case, Jobs said. The high-end model will be available next month, and the other two models are available now.

Shares of Apple closed down $4.31, or 17 percent, at $20.79 on Wednesday.

Goldman Sachs analyst Joe Moore speculated that Apple's aging iMac product line is the reason the company's financial outlook isn't better. Apple watchers were hoping that Jobs would unveil a brand new iMac in his keynote speech, Moore wrote in a research note. But Jobs didn't deliver.

"It seems that the bulk of the shortfall in September is coming from the iMac lineup," Moore wrote, referring to the company's current quarter.

Mac fans at the trade show weren't particularly thrilled either.

"There wasn't anything that seemed truly exciting," said Thomas Simonet, a professor of journalism at Ryder University in New Jersey. "The conference was disappointing compared to last year's, and it didn't live up to the rumor that Apple might introduce a handheld device."

"I was expecting more out of the hardware lineup," said Jeff Ondovic, another attendee. The only thing Ondovic was happy about was the company's decision to get rid of the Power Mac G4 Cube. "Last year's conference was definitely better."

Jobs used the early part of his keynote address to focus on Mac OS X, Apple's new operating system.

Jobs gave a preview of Mac OS X 10.1, which he said would ship in September and offer support for playing DVD movies, along with new networking features and improved handling of digital photos. Jobs also promised faster launching of applications, resizing of windows and other performance enhancements.

"You name it, it's faster," said Jobs, who appeared in his trademark blue jeans and mock turtleneck.

Jobs also announced that the company plans to open four more retail stores next month at malls in Minnesota, Chicago, Boston and Dallas.

"We think they are a great complement to the other great retailers we have out there," Jobs said.

Aiming to demonstrate support for the new Mac operating system, Jobs showed off 10 programs under development for OS X. First came Microsoft to discuss the Office business-application software due to be released this fall.

Adobe Systems, which decided not to set up a booth on the show floor at Macworld, came next. Adobe showed off development versions of Illustator, InDesign, and GoLive. Jobs also invited representatives of Quark, Apple's own FileMaker, 3D graphics maker Alias Wavefront, IBM's ViaVoice unit, encyclopedia maker World Book, game makers Blizzard and Aspyr, and Connectix, which showed a technology preview of Virtual PC, which allows Windows programs to run on Mac OS X.

"They are 10 of the next 1,000 apps coming to OS X that we are going to see in the next few months," Jobs said.

News.com's Sandeep Junnarkar and staff writer Larry Dignan contributed to this report.